Welcome to the Data Storage Corporation First Quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Alexandra Schilt, Investor Relations for Data Storage Corporation. Thank you. You may begin. Thank you. Good morning, everyone, and welcome to Data Storage Corporation's 2025 First Quarter Business Update Conference Call. On the call with us this morning are Chuck Piluso, Chairman and Chief Executive Officer, and Chris Panagiotakos, Chief Financial Officer. The company issued a press release this morning containing its 2025 First Quarter financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before we begin, I'd like to remind listeners that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans, and similar expressions, or future or conditional verbs such as will, should, would, may, and could, are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations include, but are not limited to, the company's ability to benefit from the IBM cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its NASDAQ listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the company's annual report for the year ended December 31, 2024, quarterly reports on Form 10Q, and current reports on Form 8K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements where the results of new information, future events, change the circumstances, or otherwise. I'd now like to turn the call over to Chuck Piluso. Please go ahead, Chuck. Thank you, Ali. Good morning, everyone, and thank you for joining us on today's call to review our First Quarter 2025 results. We appreciate the opportunity to update you on our progress. Before diving into our operational highlights, let me briefly touch on our First Quarter financial performance. Revenue was $8.1 million, with our core cloud infrastructure and disaster recovery services growing 14% year over year. We delivered $2.86 million in gross profit, maintaining margin stability. Adjusted EBITDA came in at $497,000, reflecting our ongoing focus on operational efficiency, even as we make targeted investments such as CloudFirst Europe. Finally, we closed the quarter with $11.1 million in cash and marketable securities, and we remain debt-free, a position we believe is critical as we explore future growth opportunities and strategic alternatives. I will now shift over to what we've built and how our strategy is enabling us to scale faster and smarter. At Data Storage Corporation, our mission is to support enterprises and institutions with cloud infrastructure, disaster recovery, and business continuity solutions that are mission-critical in nature. This includes protecting core business systems, ensuring regulatory compliance, and enabling operational resilience in an increasingly complex IT environment. Our operating platform, CloudFirst Technologies, is purpose-built for reliability, scalability, and security, particularly for IBM Power Systems. These workloads remain prevalent in financial services, healthcare, manufacturing, and public sector organizations, sectors where performance and uptime are non-negotiable. CloudFirst is optimized to meet these specialized needs, and as the migration is underway and these industries and companies look towards cloud-based solutions, the uniqueness of our offering, rooted in deep IBM Power infrastructure expertise, sets us apart. We are not chasing commodity cloud workloads. We are delivering enterprise-grade hosting, backup, recovery to clients with rigorous infrastructure requirements, many of whom operate under regulatory oversight. It's a deliberate model. We've built our value proposition around long-term infrastructure partnerships. That foundation is increasingly attractive as clients prioritize resilience, compliance, and predictability. A key part of this momentum is our expanding infrastructure footprint and partner ecosystem in the U.K. through CloudFirst Europe. Over the past several months, we've formed strategic relationships that significantly extend our capabilities in the region. In November, we partnered with Brightsolid, a trusted data center operator in Scotland with tier-three facilities. This partnership gives us secure, high-availability infrastructure in the region and enables CloudFirst to serve regulated clients in Scotland and Northern England with enterprise-grade redundancy and performance. In January, we expanded our relationship with Megaport into the U.K., enabling private cloud connectivity via their Direct Connect platform, positioning us to provide direct, secure, high-speed access to AWS, Azure, and Google Cloud without traversing the public internet. This improves performance, enhances security, and enables seamless hybrid cloud deployment. Later in January, we launched a partnership with Polson, the most geographically diverse edge data center provider in the U.K. Through this relationship, CloudFirst now operates across multiple edge locations throughout the country, embedding our IBM Power-based infrastructure directly into Polson's footprint. This accelerates our time to market and introduces us to new enterprises that are ready or within the Polson ecosystem. These partnerships are highly strategic. They allow us to meet clients where they are geographically, operationally, and technologically while offering the flexibility, compliance assurance, and performance they expect. Each relationship is built to support long-term delivery, deep integration, and scalable growth. While we are encouraged by the ongoing performance of our business and overall financial position, we must acknowledge a disconnect between our operating fundamentals and our current equity valuation. Our stock price does not, in our view, reflect the value of the business, particularly the recurring nature of our cloud infrastructure revenues, our high retention rate, and our differentiated platform. We will continue to seek ways to unlock value for our shareholders. As we look ahead to the remainder of 2025 and beyond, I want to take a moment to reflect on how far we've come and where we're headed. Through a combination of targeted geographic expansion and a clear focus on our core strengths, we have laid the groundwork to become a global leader in cloud infrastructure services. Today, we are proud to stand as one of the very few global single-source providers of both disaster recovery and multi-cloud hosting solutions, including integration with AWS, Microsoft Azure, and Google Cloud. This is particularly true of our IBM Power platform, where we continue to lead with unmatched specialization and performance. Our ability to support IBM i and AIX workloads gives us a valuable market advantage and a distinct competitive edge, especially as enterprises look to modernize their infrastructure without compromising legacy reliability. Our differentiation here is not incidental. It's intentional. It's built on decades of expertise, long-term client relationships, and the proven ability to deliver. As we move forward, our priorities are clear: grow our high-margin recurring cloud-first revenue, expand our global infrastructure, expand our partnership ecosystem, maintain a strong financial footing to support scalable operations, and continue to evaluate paths that will enhance long-term shareholder value. We are now operating across 10 global data centers, serving over 400 clients and managing over 600 contracts. We are proud of what our team has accomplished operationally and financially and remain confident in our staff and our platform. While we operate in a complex and evolving IT environment, our core value proposition remains clear and relevant, ensuring continuity, security, and performance for mission-critical systems while delivering a high level of client satisfaction. With that, I'd like to turn the call over to Chris Panagiotakos, our CFO, to discuss our financials. Please go ahead, Chris. Thank you, Chuck. Good morning, everyone. Total revenue for the three months ended March 31, 2025, was $8.1 million, a decrease of approximately 2% compared to $8.2 million for the three months ended March 31, 2024. The decrease is primarily attributed to a decrease in one-time equipment sales during the quarter. Cost of sales for the three months ended March 31, 2025, was $5.2 million, a decrease of approximately $45,000 or 1% compared to $5.3 million for the three months ended March 31, 2024. The decrease was mostly related to the decrease in one-time equipment-related cost of sales. Selling, general, and administrative expenses for the three months ended March 31, 2025, were approximately $3 million, an increase of approximately $200,000 or 2% as compared to $2.8 million for the three months ended March 31, 2024. The increases were primarily due to an increase in professional fees, stock-based compensation, and an increase in headcount. Adjusted EBITDA for the three months ended March 31, 2025, was $497,000 compared to adjusted EBITDA of $680,000 for the three months ended March 31, 2024. Net income attributable to common shareholders for the three months ended March 31, 2025, was $24,000 compared to net income of $357,000 for the three months ended March 31, 2024. We ended the quarter with cash and marketable securities of approximately $11.1 million at March 31, 2025, compared to $12.3 million at December 31, 2024. Thank you, and I will now turn the call back to Chuck. Thanks, Chris. Let's open it up to some questions. Thank you. If you'd like to ask a question, please press * 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press * 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. Our first question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question. Hey, good morning. Thanks for taking my questions. Maybe we could start with where should we, where are we on the European expansion? I guess in terms of the business development side, I know you've sort of gone through the infrastructure side in Europe now. Where are we in the business development and sort of bringing business into those assets now? Thanks, Matt, for the question. On the business development side, we had started investing in the U.K. in October timeframe with some consultants, and then we solidified all of that. Now we have a Managing Director there. We have a Solution Architect and a Partner Manager. In the third week of January, we installed the equipment in three data centers in the U.K. During the time of the from consultant to employee, let's call it six months, we've established approximately I think there might be more right now, but the last number I saw was 10 partnerships, distributors that we have established, and the folks are out there doing training on those three data centers. The data centers that we're in, actually, we're training their sales reps so that they can actually take the orders and build them out. We've installed it, and we're part of their, we'll call it product list or service or solution list today. Training's been going on. A lot of meetings have been going on to be able to educate them so that they can bring that out to their existing clients because we're talking about going after their client base. Our folks are involved when they go on those calls because we find a much higher close ratio when our folks are with the partner. These are actually partnership-type arrangements, not just a rack of equipment, and we're putting salespeople on the ground. We're going after, essentially, with them, their client base. They have, we'll call it suspects, prospects. We're expecting to, hopefully, I would anticipate revenue to start in the fourth quarter of 2025. We're hoping, I would imagine, we're hoping that the month of January 2026 is that month will be the first month to break even. Chris, how much money has been invested so far in the U.K.? For the quarter, it was around $450,000. That's why you'll see that decrease in EBITDA, right, Chris? Correct. Added that hopes. Yeah. Maybe if you could also just give us some color on where the, from what you're seeing, where the European market is on shifting to a more cloud services consumption model versus just buying for their own data center and managing their own infrastructure. Are they further along that process than U.S. market, or are we sort of getting to an inflection point there? Oh, it would be a lot of speculation on my part to actually give you an answer that's kind of definitive, but I will say that we know that IBM stated that there's approximately $90 million a year in revenue that will be migrating each year. That we know, and that was a conference we attended in Europe. We were in the Commons, which is a user event that takes place every year. They have made that statement. By the count of their customers that they actually have, I believe that CloudFirst has more customers at that time than they do from side meetings. I do not want to make a commitment on that, but that's what it seemed like. The migration is going across the board that people are moving to it. The big obstacle in a lot of cases was that people were concerned about security when they're moving to the cloud. I think that that pretty much has been showing with the momentum that's going on that the security objections and stuff, we're able to overcome that today. Actually, in many cases, have newer equipment, a better environment, tier III data centers. I think we're positioned very well. We may move into Europe itself so that we can serve it. A couple of the distributor partners that we do have that are very large are saying their customer base is also in Europe. We're expecting, and I would anticipate seeing something in Europe to be able to tie that together. Our CTO, Chuck Paolillo, is working on all of the security requirements and regulations in Europe as we speak. Thanks. Great call. I'll jump back in the queue. Thank you. Our next question comes from the line of Adam Waldo with Lismore Partners. Please proceed with your question. Good day, Chuck and Chris. I hope you can hear me okay. Sure, Adam. How are you? I'm well, Chuck. How are you? Good, thanks. If you don't mind, I'm going to start with a couple of financial reporting housekeeping questions for Chris and then turn to strategic and capital allocation questions for Chuck. Chris, when do you expect to file your Form 10Q for the quarter? It's going to be filed today. Great. Okay. As you exited the first quarter, how did the run rate annual recurring revenue of the business compare with the $21.5 million that you had exiting the fourth quarter that you reported with fourth quarter results back in March? The annual recurring revenue for the quarter was about $6.7 million. The new estimate for the annual recurring revenue is a little bit over $22 million for the year, the estimate. Okay. All right. Good. And then the remaining customer contract value at the end of the first quarter was what as compared with the $39.2 million that you reported at the end of the fourth quarter? I don't have a number for you right now. Okay. That's fine. On that, I could give you some color on a little bit differently is that all of the contracts that are in place today, the total contract value on that was in excess of $41 million. I would say that more than 95% of those have an auto renewal clause in there that auto renews at their initial term. For the most part, it is the total contracts that are in existence today when they were signed up and that are billing around $41 million. That's really helpful. And will the queue contain a specific number on that, Chris, as we've seen in the K and some of the Qs in the past, or is that kind of? No. Okay. It won't. Okay. We're not going to be reporting that number in Q1. Just to give some color on that a little bit, so we're very transparent on it. What ends up happening is the renewal rate that we have is very significant. What happens is you have a sales organization, some people that if they've turned over a little, what ends up happening is when a renewal takes place, they have to put in the new beginning and end of the term because it just renewed over. What ends up happening is that we're making a major effort to be able to say beginning and end term on the new agreement. We keep on trying to refine that. What we do know is that those initial terms were the $41 million. When we work with Salesforce on this, we're always kind of looking what that is, looking who has an automatic renewal rate and whatever their term is that they renew. In very few cases, very few cases, we have folks that are there, I'm going to say probably less than 10, that are on short-term agreements because let's say they're trying to move off of the platform, which is very hard for them to do. Let's say they're doing that. They might be on a six-month agreement to transition off of the platform. Those folks we have as not automatically renewable, but there's not many of them. We're really trying to refine that. We always look at what the total contract value is of who's billing today. In our agreements that we have, Harold Schwartz made some adjustments to that, I think a few years ago where in the agreement, it says that we have the right to increase them 10% at the end of the term. When you look at that $41 million, if all of them move over again, you're looking at $4 million on top of that unless they fall out or something. That's pretty good. We've made those adjustments, Harold did in the past. We like that, and that's what's happening. When they renew, it's 10% higher. Okay. That's really helpful. One last financial reporting question, and then I'll jump back in queue for the strategic and capital allocation questions for Chuck later. On the financial reporting side, can you just give us a sense for what the revenue would have been in the first quarter of this year and what it would have been last year in the first quarter of 2024? If we'd stripped out just the equipment sales from both quarters' numbers, what would the year-over-year revenue growth rate have been? I can get you that number, Adam, and email it to you. Back of the envelope, it'd be strongly into the double digits, right? I'm not sure. I'd rather just look at the numbers and just give you a definite answer. Okay. Thank you. I'll jump back in the queue. Okay. Thank you. Ladies and gentlemen, as a final reminder, if you'd like to join the question queue, please press *1 on your telephone keypad. Our next question is a follow-up from the line of Adam Waldo with Lismore Partners. Please proceed with your question. Okay. Thanks. On the strategic and capital allocation side, Chuck, in your prepared remarks, you made reference to strategic alternatives. You made reference to continued understandable frustration with the stock price relative to the sort of private market value of the company. This has been a source of frustration, I know, for a number of quarters. What steps might the board pursue here? Does that include potentially pursuing strategic alternatives? Could management start to institute quarterly and annual financial performance guidance for the markets? What are some of the things that you all are thinking about to try to close that valuation disconnect between where your stock's trading and the private market value of the company? We were in OTC hell from 2008 - 2021. Now we're in microcap space, which we have some great institutions that have invested in the company. They're there long-term. We have retail that moves us up and moves us down. We need to be able to see a very stable share price for us to be comfortable that's in line where Matt, who follows us and writes about us, and we're not seeing that $9. As to strategic alternatives, I mean, it's everyone's strategic alternatives. What would it be? If I went into ChatGPT and said, "Give me the strategic alternatives for every microcap that has a great subsidiary," what would it be? Undervalued with cash in the bank. Buy back shares, carve out the company and sell it to a PE firm, buy back warrants, just suffer along and watch the thing at $3.50, and others take advantage for a short period of time of running it up $2 and running it back. I mean, you can go into ChatGPT and get like five alternatives. I mean, there are probably five alternatives that go on. We're just looking at everything, quite frankly. We just need to deliver shareholder value. We just need to do that. Where it's sitting right now, and for me, with various trusts or individually, I have 13% of the company. It's not that much, not that little. For the most part, I'm with everyone else on this. Our objective is to be able to deliver shareholder value. As I say, all the alternatives. It's like when you meet with somebody and you say, "Gee, what's your plan? Do you have a great company? What's the exit?" You always ask that question. Frankly, I think there's a number of different alternatives, and we'll see where that is. Our focus is on shareholder value. We have insiders own 41% of the company. Frankly, we're always focusing on the other folks that are all owning public shares and feel that responsibility to be able to deliver that and not languish at where we are. It's very frustrating, Adam. No, understood. Just to follow up, though, are you all considering instituting a formal quarterly and annual financial guidance process to the street to potentially help close that valuation gap, or is that still something that is really not being contemplated? We've been encouraged by folks that actually own shares when we have investor conferences and things like that to do that. Even though CloudFirst had, what, $1.5 million EBITDA? Correct. A million and a half EBITDA for the first quarter. I'm not going to say that it's $6 million for 2025. I'm not going to say that, but that would be great. But it's $1.5 million for the quarter. We've been encouraged to do that. We probably could, but I don't think we want the we've been advised against it, quite frankly. So we're taking the advice that we pay for not to do that. Okay. Thank you very much, and best wishes for the rest of 2025. Thank you. Thanks, Adam. Thanks for the questions. Thank you. Ladies and gentlemen, there are no other questions in line. I'll turn the floor back to Mr. Piluso for any final comments. Thank you. Thanks for the questions, Matt and Adam. Before we conclude, I want to reiterate that our priorities remain clear: delivering reliable, high-performance infrastructure to organizations with complex regulated IT environments, expanding into new markets and geographies, and doing so with financial discipline and operational integrity. We recognize that our current market valuation does not reflect the true strength of our core business, particularly the performance of CloudFirst, our growing international reach, and our recurring revenue model. That is why we've shared with the board and the leadership team that we're actively evaluating a range of strategic alternatives to unlock and deliver long-term shareholder value. We appreciate your continued support and interest in Data Storage Corporation, and thank you once again for joining us today. We look forward to keeping you informed as we move ahead. Thank you. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.